Aspects of the economics of water management in urban settings in South Africa, with a focus on Cape Town

[摘要] ENGLISH ABSTRACT: Concerns about the sufficiency of freshwater supplies and the impact of water shortageshave placed sustainable water management on the global agenda. This is particularlyrelevant in South Africa, a country with precipitation rates well below the global averageand water resources that have become highly polluted. The scarcity of water forconsumption use and of unpolluted water bodies as recreational and environmental goodhighlights the need for an economic analysis of these issues. This dissertation investigatessome economic aspects of water management in the South African context in twodistinctive parts. Part One (Chapters 2 to 5) aims to provide an understanding of urbanwater demand and analyses water pricing as demand management tool. Part Two(Chapters 6 and 7) analyses the values people attach to water resources for recreationaland environmental purposes. Quantitative methodological approaches are predominantlyused to inform an economic perspective on water demand management.The extent of water scarcity is discussed in Chapter Two. South Africa is approachingphysical water scarcity, but many poor households do not yet have access to water andbasic sanitation facilities, i.e. there is also economic water scarcity. Given this background,Chapter Three focuses on water demand management as part of an integrated watermanagement approach. The role of water prices is discussed, in particular the IncreasingBlock Tariff (IBT) structure which is predominantly used in South Africa.Chapter Four estimates the price elasticity of demand for water using household waterconsumption records obtained from the City of Cape Town (CCT). A distinctive feature ofthis case study is a survey undertaken to collect household information on demographicand water-use characteristics, as water databases are severely lacking in South Africa.The results show water demand to be mostly price inelastic, which concurs with findingsfrom international empirical literature. Furthermore, higher-income households are found tobe more sensitive to price changes, thus some reduction in water consumption can beachieved by increasing marginal prices at the upper end of the IBT structure.Chapter Five analyses the IBT structure as a redistributive tool. Particular attention isgiven to the Free Basic Water policy of South Africa, which allows each household toreceive six kilolitres of water free per month. Empirical modelling indicates that the IBTstructure in its current form holds limited benefits for the poor, given the state of service delivery in South Africa: the lack of access to the water network prevents the pooresthouseholds from being the recipients of the cross-subsidisation occurring in an IBTstructure.Part Two studies urban water resources as recreational and environmental goods. Theliterature review of environmental valuation techniques in Chapter Six places particularemphasis on the Contingent Valuation Method. This method is applied in Chapter Seven,where the value of improving the environmental quality of a freshwater urban lake isanalysed in a middle- to low-income urban area. Another survey was undertakenspecifically for this purpose of gauging the willingness to pay for improved recreationalfacilities and water quality of Zeekoevlei. The results show that low-income households doattach value to urban environmental goods, a result which adds to our knowledge ofwillingness to pay for environmental goods in developing countries.

[发布机构] Stellenbosch University